Keeping your cool this summer: top tips for employers

Written by
Shaun Hogan

26 Aug 2016

26 Aug 2016 • by Shaun Hogan

Holiday pay

Holiday pay has been a hot topic in recent years, with the courts steadily widening the types of remuneration which need to be included in holiday pay calculations. For example, it has been held recently that certain overtime payments, commission, and shift allowances should be included. There are however still significant areas of uncertainty, such as the period over which commission payments need to be considered and whether voluntary overtime should be included.

While we wait for the courts or Parliament to clarify these issues, employers should review their current practices and consider how they wish to deal with holiday pay, as well as the extent of potential exposure they may have.


Employment status

Employment law distinguishes between 3 categories of individual; employees, workers and self-employed. Employees benefit from more rights and a greater level of protection than workers, while the self-employed have comparatively fewer rights than workers.

A growing number of organisations appear to be pushing the boundary between these categories, often to keep costs low. For example, Uber currently treats its drivers as self-employed and is now facing tribunal claims from two of its drivers who claim that they are in fact workers.

The outcome of this case could lead to claims being brought against a number of other businesses operating similar models, such as courier companies, so take the time during the slower summer months to review your practices. 

The impact of Brexit

The uncertainty surrounding Britain’s decision to leave the EU affects many areas of business and employment is no exception. While many business decisions will not be made until we have greater clarity over the timing of Britain’s exit and the terms negotiated with Europe, there are a number of planning and auditing steps that employers can take now. Employers will need to avoid making promises to staff which they may not be able to keep, and will need to be wary of unlawfully discriminating against non-British job applicants on the basis of assumptions about future employability.


Changes to immigration rules

Employers should check to what extent their workforce is reliant on EEA labour, as immigration controls for EEA nationals may be introduced post Brexit. In the meantime EEA workers may also wish to make applications to the Home Office for permanent residence if they have been in the UK for at least 5 years. It will also become more expensive for employers to hire non EEA nationals over the next few months as minimum salaries for sponsored workers are increasing and a new Skills Surcharge is being introduced in April 2017. 

Employers should also carry out audits to check all employees have the right to work as the Home Office is clamping down on illegal working and employers face civil penalties of up to £20,000 per person as well as possible criminal prosecution if someone is found to be working illegally. 

Gender pay gap reporting

he Regulations requiring companies with at least 250 employees to report on the difference between the pay of male and female employees were due to come into force in October 2016. Indications are this will be delayed until April 2017.

Employers should use this time to conduct a pay audit establishing where there may be a gap and devise a plan to address this as well as how best to present the information.